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Notary Public Underwriters Blog

Year-Round and Tax-Time Tips for Sole Proprietor Notaries: Income

 

Many Notaries—even those who notarize primarily for work—earn extra money on the side by performing notarizations for the general public and charging the allowed statutory fee.

Some Notaries are full-on sole proprietors whose primary income is generated by fees for the notarial acts they perform, as well as fees for other general business services the Notary may offer.

No matter the amount of sole-proprietor work a Notary performs, the obligation to keep meticulous business records is a serious one. Establishing simple but consistent business recordkeeping practices at the beginning of the tax year saves considerable time on the back-end, when it’s time to report your annual earnings.

Notary Income Tracking and Reporting Recommendations

Step 1 – At the beginning of each business year, check federal, state* and municipal* income reporting requirements to verify what personal income information you must track and record over the coming months of the new tax year.
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*NOTE: According to The Balance (www.thebalancemoney.com) about a third of all states allow their counties, municipalities and other local jurisdictions to impose an income tax.

Step 2 – Establish consistent, sound tracking and recording of all Notary income throughout the year. Try using a receipt book—it’s one of the simplest, yet most effective tools. A receipt book generally provides multiple receipt coupons per page, and retains a duplicate copy of each receipt (the “carbonless” format). Accurately date each receipt and enter the name of the customer just as you entered it in your Notary record book (journal). Most importantly, in your receipt book and notary record book, always itemize your fee for any notarial act separately from the other business fees you may charge.

Step 3 – Securely store all filled receipt books together with all records of your business expenses. It’s particularly helpful at tax-time to know exactly where to look for all your Notary business income and expense records. Always securely store your Notary record book (journal)… your record book entries also help you verify notarial-act fees that you charged over the past year.

Step 4 – When tax season arrives, gather your receipt books and stored record books for the prior tax year and begin compiling your past year’s Notary income information.

PLEASE NOTE: This information is not intended to replace the advice and counsel of a trained tax advisor or attorney. If you need help with income tracking, reporting and tax filing, please consult an individual with expertise in those particular matters.

Category: Notary Blog